Friday, December 10, 2010
Posted by D. Daniel Sokol
Aditya Bhattacharjea (University of New Delhi) explains India's New Antitrust Regime.
ABSTRACT: India passed a new Competition Act in 2002 to replace its Monopolies and Restrictive Trade Practices ("MRTP") Act of 1969. Enforcement of the new legislation was, however, delayed by more than six years. First, the Indian Supreme Court held that the qualifications and appointment procedure specified for Members of the proposed Competition Commission of India ("CCI") violated the Constitutional separation of powers between the executive and judiciary. A single Member who was appointed to the CCI in 2003 before the Supreme Court's strictures were pronounced remained in office for nearly five years. But along with his skeleton staff, he could only engage in capacity building and competition advocacy without being able to take up any cases.
An amending Act was passed in 2007 to meet the Supreme Court's objections. It provided for a Competition Appellate Tribunal ("Compat") headed by a judge to hear appeals from CCI decisions, and to exercise powers regarded as the prerogative of the judiciary (awarding compensation or imprisonment). The amending Act also made extensive changes to the sections of the law dealing with mergers and anticompetitive practices. It was not until May 2009, however, that the government appointed a new seven-member CCI and brought into force sections of the Act that empowered it to initiate investigations and to hear cases relating to anticompetitive agreements and abuse of dominance. In September 2009, the MRTP Act was finally repealed, the MRTP Commission was abolished, and its backlog of pending investigations was transferred to the CCI, with the even larger backlog of pending cases going to the Compat.
The Competition Act is not, therefore, inscribed on a blank slate. However, I shall argue that the manner in which the MRTP Act was structured, amended, interpreted, and enforced left India with very little experience or expertise relevant for enforcement of the more economically informed Competition Act. In particular, the MRTP Commission's caseload, especially in the last two decades, was dominated by matters that had little or nothing to do with competition. Many of the complaints coming before the CCI seem to be based on similar issues. For these reasons, and because some of the competition jurisprudence developed by the MRTP Commission and the Supreme Court may influence the interpretation of the Competition Act, I provide a brief review of the working of the earlier Act before turning to its successor.